Q4 assume there are some firms operating in a perfectly competitive market that are earning negative economic profits in the short run. What would you expect to happen in this market in the long run? ( hint a duscussion of entry /exit as well as market price is inportant here also pretend you are telling a story to someone who is not in economics 1220 . You probably will want to use a diagram but it is not necessary

.ca Question 1: A) Under what conditions is a market considered perfectly competitive? B) Are all markets in the real world perfectly competitive? . Question 2: A) Assume a firm is producing in a perfectly competitive market structure. When will it make sense for a firm to produce a positive amount of output in the short run? B) Assuming it makes sense for a perfectly competitive firm to produce a positive amount of output in the short run. How would this firm choose the output level? (Hint: what is the profit maximizing choice? You could answer this in words only, but a diagram might help direct you to the answer). C) How do parts A and B combine explain the perfectly competitive firm's supply curve? Question 3: For a perfectly competitive market structure: 1. What are the conditions for short-run equilibrium? 2. What are the conditions for long-run equilibrium? 3. Why are negative economic profits possible in short-run equilibrium, but not in long-run equilibrium? 4. Why is one of the conditions for long-run equilibrium that firms are producing at the minimum efficient scale